|Amgen CEO Robert Bradway|
Amgen ($AMGN) is only weeks away from an anticipated FDA approval for its PCSK9 cholesterol reducer. Already approved in Europe, the drug is expected to quickly reap blockbuster sales. As Amgen's "new product story continues to take shape," CEO Robert Bradway said to analysts Thursday, the biotech's current portfolio of products, along with cost cuts, have helped set the stage for a big year that could possibly include M&A.
The drugmaker in Q2 breezed past Wall Street expectations and handily raised its forecast for the year. With sales of its arthritis drug Enbrel up 8% and operating expenses down another 1%, the Thousand Oaks, CA-based company said Thursday that it is looking at adjusted earnings in the range of $9.55 to $9.80 per share, up from the $9.35 to $9.65 it earlier suggested. It earned $2.57 per share in the second quarter, beating analysts' average expectations by 14 cents a share
"The magnitude of the guidance raise was substantial," said Cowen and Co. analyst Eric Schmidt. "The numbers are all very good." The numbers were good enough that Amgen's shares were up more than 4.8% in mid-morning trading today.
Bradway in Amgen's Q2 earnings call said that, while the biotech is still mostly focused on earlier-stage transactions, "we have the flexibility in the balance sheet if attractive opportunities arise that are of the larger size," according to a transcript from Seeking Alpha.
A variety of Amgen's products kicked in their share, but sales of arthritis-fighter Enbrel did particularly well, up 8% to $1.35 billion for the quarter. But it has not just been growing revenues that have fattened up Amgen's bottom line; 4,000 jobs were slashed in the last year.
But Bradway is looking forward to the launch this year of cholesterol treatment Repatha, which was approved in Europe last week and up for an FDA decision Aug. 27. A competing drug from Sanofi ($SNY) and Regeneron ($REGN), Praluent, got an FDA OK last week, setting the two up for an intense fight for market share, and potentially with payers. Sanofi has put a price of $14,600 a month on its drug, and Express Scripts ($ESRX), which beat back the prices on hep C drugs with exclusive deals, is already bracing for a fight.